States weigh legal response as Trump guts Obamacare

Executive disorder: President Trump's decision to end federal Obamacare cost-sharing subsidies will cause chaos throughout the U.S. healthcare system, according to critics.

October 13, 2017

By GREGORY ZELLER //

It’s not quite “Cuomo to Trump: See You in Court.”

But in a scathing rebuke Friday of the Trump administration’s attempts to shatter Obamacare by executive decree, New York Gov. Andrew Cuomo swung the door to a litigious civil war wide open.

One day after signing an executive order allowing the sale of some health insurance plans that are exempt from certain Affordable Care Act regulations – including rules ensuring coverage for some pre-existing conditions – President Donald Trump on Friday executed an additional Obamacare death blow: another presidential decree, this immediately ending federal subsidies that help insurers provide coverage for low-income households.

Andrew Cuomo: Pointing fingers, naming names.

And he does mean immediately: The Department of Justice announced Friday that subsidy payments end this month.

The president notes the expense – the federal government is paying an estimated $7 billion in subsidies this year and was forecast to pay more in 2018 – as his justification.

But critics say that by ending subsidy payments that help nearly 6 million lower-income Americans afford coverage, Trump’s decision will cause even greater long-term expenses for all – and in the short term, has thrown the health-insurance market into chaos, and by extension the whole of U.S. healthcare.

House Speaker Paul Ryan (R-Wis.) praised the move – “Obamacare has proven itself to be a fatally flawed law,” he said Friday – but Trump’s decision has been widely panned, and not just by usual suspects like House Minority Leader Nancy Pelosi (D-Calif.) and Senate Minority Leader Chuck Schumer (D-NY), who cited a “spiteful act of vast, pointless sabotage leveled at working families and the middle class” in a joint statement.

According to a recent analysis by the Urban Institute, a Washington-based thinktank focused on social issues in urban settings, cutting government subsidies for insurers covering low-income customers will actually cost the federal government an additional $7.2 billion in 2018 – on top of the $7 billion it’s spending this year – because the law requires it to shell out more in premium subsidies to cover higher rates.

And higher rates are coming, according to the nonpartisan Congressional Budget Office, which predicts premiums on Obamacare plans will spike across the board – with those higher premiums increasing the national debt by $194 billion over the next decade, and many insurers fleeing the marketplace completely.

But no critic spoke louder than Cuomo. While the governor is a frequent Trump critic, he has been customarily careful not to mention the president by name, often citing the flaws of “the administration.” But on Friday, Cuomo was naming names – and hitting back hard against a move that will “singlehandedly destabilize insurance markets.”

Chuck Schumer: Spiteful Trump’s “sabotage.”

“Unable to move the repeal of the Affordable Care Act in Congress, President Trump is now attempting to administratively dismantle the ACA bit by bit,” Cuomo said in a statement. “His actions will slash benefits and raise premiums in many health plans by 20 percent next year, according to the Congressional Budget Office.

“With a swipe of a pen, President Trump puts the health of New Yorkers at risk,” the governor added. “We will not stand silently by as the federal government tries to take away healthcare from New Yorkers.”

To that end, Cuomo is calling on other states to band together for a potential lawsuit against the federal government, aimed at ensuring health-insurance protections for low-income households.

The New York chief executive has plenty of company. A U.S. Appeals Court in the District of Columbia is already hearing a case brought by 16 state attorney generals – all Democrats, including New York AG Eric Schneiderman – defending the legality of the subsidy payments.

And Reuters reported Friday that AGs in New York, California, Kentucky, Massachusetts and California were gearing up a separate suit, to be filed in federal court in California, seeking to force the federal government to make the next scheduled Obamacare subsidy payments.

“As President Trump executes on his mission to strip healthcare protection from those who need it most, we stand ready to join states across the nation to sue the federal government,” Cuomo said. “We will not go backwards.”